Tracking non-billable activities
Is it worth it?
Every lawyer knows that accurately measuring billable activities is a necessary evil. But when you ask them about recording non-billable time, they often shrug their shoulders and say “It’s not billable so why does it matter?”.
Non-billable activities can provide invaluable insights for making strategic decisions on staff, revenue and the work-life balance for employees. Especially if your firm works on a fixed fee basis.
Why track billable time
So you have worked 10 hours, but only 7 can be billed? What happened to the rest of your activities? All lawyers have found themselves in this position more often than not. Tracking your non-billable activities may reveal an opportunity to streamline an internal process.
Time is money. Unlike money, time can’t be won back and therefore it is our most valuable asset. While much attention is given to monetary insights, it appears as though insights in time spent is a better predictor of which areas you should optimize in order to reduce overhead. There is no doubt that if people are asked to enter all their time that they will increase the time captured. Only by capturing non-billable time can one effectively chart a day and determine gaps.
The individual gains are considerable, but a firm as a whole can benefit from this as well. It could be that associates are registering time inappropriately, or that they are doing work that could be done by supporting staff. This can be easily caught and resolved by capturing all activities.
Transparent reporting could also remove barriers between partners and associates. Associates might feel they are being treated fairly when everyone is measured and the results are published. These reports can also be circulated to the non-lawyer management team.
How do lawyers spend their non-billable time?
The legal trends report from CLIO states that finding new clients and administrative duties amount for the biggest percentage of non-billable time. They found that a whopping 48% of time is spent on administrative tasks. Some fragments from the report:
“Office administration, generating and sending bills, configuring technology, and collections are all tasks that, combined, eat away 48% of time that could otherwise be spent on billable tasks.”
“The fact that so much non-billable time is dedicated to business development (33%) suggests earning new clients is a constant concern for most law firms.”
AFA’s and non-billable activities
Most of the firms require a certain amount of billable hours from their fee earners. Which makes it important for these fee earners to streamline their non-billable activities as much as possible. Especially in fixed fee arrangements it is essential to keep track of these activities. Because it will tell you how you can save time on the next matter and therefore increase profitability and productivity.
For example, it may reveal that administrative tasks take up a lot of time. If you can streamline this process for the next case, it will increase productivity for you and your staff and ultimately increase your bottom line.
In conclusion. Time can’t be won back and is therefore our most precious asset. Lawyers are busier than ever, rushing from one activity or matter to the next. Tracking your non-billable activities as much as your billable activities will help you in the long run to be more productive and profitable.